Key Takeaways
- Coverage C is NO-FAULT medical payments coverage—it pays for medical expenses of injured third parties regardless of the insured's legal liability.
- The standard limit is $5,000 PER PERSON, with no aggregate limit (though it's subject to the policy's total limits).
- Medical expenses must be INCURRED and REPORTED within ONE YEAR of the accident date.
- Coverage C is designed as a GOODWILL measure to settle small injury claims quickly and avoid lawsuits.
- Coverage C does NOT apply to employees (Workers Comp), tenants residing on premises, or persons eligible for Workers Compensation benefits.
Coverage C: Medical Payments
What Coverage C Provides
Coverage C pays for medical expenses of persons (other than insureds) who are injured:
- On premises the insured owns or rents
- On ways next to those premises
- Because of the insured's operations
Key Feature: NO FAULT required—the insured doesn't need to be liable for the injury.
Purpose of Medical Payments
Coverage C serves as a goodwill coverage:
| Purpose | Benefit |
|---|---|
| Quick Resolution | Settles small claims without litigation |
| Customer Relations | Maintains goodwill with injured parties |
| Cost Savings | Less expensive than defending lawsuits |
| Public Relations | Shows concern for injured persons |
Example: A customer trips on a rug in a store and sprains an ankle. Even if the store wasn't negligent, Coverage C pays the customer's medical bills up to the limit, avoiding a potential lawsuit.
Coverage Requirements
For Coverage C to apply:
1. Accident Location
The accident must occur:
- On premises you own or rent
- On ways immediately adjoining your premises
- Because of your operations (anywhere)
2. Condition of Injured Person
The injured person must be a member of the public, NOT:
- An insured
- A person hired to work for the insured
- A tenant (residing on premises)
- A person eligible for Workers Compensation
- A person injured while participating in athletics
3. Timing Requirements
| Requirement | Time Frame |
|---|---|
| Expenses Incurred | Within 1 year of accident date |
| Expenses Reported | Within 1 year of accident date |
Both conditions must be met for coverage.
Medical Expenses Covered
Coverage C pays for:
| Expense Type | Examples |
|---|---|
| First Aid | Immediate treatment at scene |
| Ambulance | Emergency transportation |
| Hospital | Emergency room, inpatient care |
| Medical | Doctor visits, specialists |
| Surgical | Operations, procedures |
| X-ray | Diagnostic imaging |
| Dental | Dental treatment for injury |
| Professional Nursing | Required nursing care |
| Prosthetic Devices | Crutches, braces |
| Eyeglasses/Hearing Aids | Replacement if damaged |
| Funeral Expenses | In case of death |
Coverage C Limits
| Limit Type | Typical Amount |
|---|---|
| Per Person | $5,000 |
| Per Accident | Not typically specified |
| Aggregate | Not typically specified |
Note: The $5,000 per person limit can be increased by endorsement.
Who Is NOT Covered
Coverage C specifically excludes these persons:
| Excluded Person | Reason |
|---|---|
| Insureds | Use own health insurance |
| Employees | Workers Compensation applies |
| Tenants | On rented premises |
| Workers Comp eligible | WC is exclusive remedy |
| Athletes | In athletic activities |
Coverage C Exclusions
Medical payments are NOT made for injury:
Activity Exclusions
| Exclusion | Details |
|---|---|
| Athletic activities | Except during school athletic events insured sponsors |
| Products not on premises | Products away from location |
| Completed operations | Work finished before injury |
Location Exclusions
| Exclusion | Details |
|---|---|
| Any premises not covered | Must be scheduled premises |
| Premises rented to others | Tenant's responsibility |
Person Exclusions
| Exclusion | Details |
|---|---|
| War | War-related injuries |
| Workers Compensation | Persons eligible for WC |
Coverage C vs. Coverage A
| Feature | Coverage A (Liability) | Coverage C (Med Pay) |
|---|---|---|
| Fault Required | Yes - must be liable | No - no-fault |
| Limit | Per occurrence (usually $1M+) | Per person ($5,000 typical) |
| Defense Provided | Yes | No (no lawsuit) |
| Purpose | Compensate for negligence | Goodwill, avoid lawsuits |
| Expense Type | All damages | Medical only |
Key Exam Points
- No-Fault Coverage: Liability is NOT required
- $5,000 Standard Limit: Per person, not per accident
- One-Year Rule: Expenses must be incurred AND reported within one year
- Excludes Insureds: Employees and other insureds are not covered
- Goodwill Purpose: Designed to settle small claims quickly
Coverage C (Medical Payments) under a CGL policy pays for medical expenses:
Under Coverage C, medical expenses must be incurred within what time period?
Which of the following persons would be EXCLUDED from Coverage C benefits?
8.5 CGL Exclusions
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